Shrenuj buys 84% stake in US jewellery distributor

Diamond and jewellery company Shrenuj & Co has acquired 84.6 per cent stake in Simons Golub & Sons (SGS), one of the top five US jewellery distributors.

The deal, valued at $22.7 million (Rs 92.67 crore), will enable the company to consolidate its position in the American jewellery market and enter North America. The acquisition will help Shrenuj expand its US operations.

Vishal Doshi, president- business development, Shrenuj, said, "The US is the largest diamond jewellery market with 50 per cent of the global consumption. The acquisition has given the company direct access to American consumers through 2,400 independent retailers and 40 jewellery chain stores. In 2006, Simon Golub & Sons, an 80 year-old US distributor, clocked a turnover of $136 million. The deal was funded by long-term debts, FCCB and internal accruals.

Shrenuj plans to tap the American market by undertaking aggressive marketing and brand-building activities. "The company will be introducing new brands. We are present in 13 countries and are exploring the option of cross-border marketing and bran-building initiatives," said Doshi.

Shrenuj is also chalking out a strategy to tweak Simons Golub & Sons' umbrella brand SGS, which is largely a business-to-business brand.

Doshi said, "The SGS deal would add $150 million to our bottom line in three years. The company would be utilising the managerial expertise from the US and the Indian manufacturing strength to leverage the massive distribution system."

He mentioned that the company is looking for buyouts in other countries.